Capitation payment will be paid to the practice for covered services on a per member per month (PMPM) basis. The PCP receives separate capitation payments for members of M.D. IPA and Optimum Choice monthly, on the fifth day of each month.
The PMPM is calculated by multiplying the fixed monthly rates (detailed in the Capitation Rate Schedule contained in your agreement) by the number of members who have selected or been assigned to a PCP within the practice.
The capitation payment for a given month is calculated based on the 15/30 rule. This rule is used to determine whether a capitation payment is made for the full month or not at all. If the effective date of member change falls between the first and 15th of the month, the change is effective for the current month.
If the effective date of the member change falls on or after the 16th of the month, the capitation adjustment is reflected on the first of the following month. As such, retroactive adjustments to capitation payments may be made based on the member’s eligibility on the 15th of the month.
For purposes of capitation payments, members are added on the first day of the month or terminated on the last day of the month, with the exception of newborns, which are added on the date of their birth(s). Capitation is paid for full months, and conversely recouped for full months if appropriate. For example:
A member added retroactively on the 14th of the month would generate a capitation payment for the entire month. However, a member added on the 16th or later would not generate a capitation payment, even though the member would be considered eligible for services. To help you identify these members, the member’s standard services capitation is reported as $0.
A member retroactively terminated between the first and 14th of the month would generate a capitation recoup entry for the capitation previously paid for the entire month. However, a member retroactively terminated on the 16th or later would not generate a capitation recoup entry for the capitation previously paid for the entire month.